SPREADS
March crush trades to 97c/bu while oilshare trades down to 35.74%. July/Dec corn trades from 1 3/4c to 2c, while March/May trades back out to 7c from 6 3/4c. July/Nov beans trades out to 3 1/4c from 1 3/4c. March wheat/corn trades to 1.85c from 1.80c. March/May meal is slightly wider out to $4.70 from $4.50.
PALM OIL
March down 60 ringgits, with Malaysian Feb cash offers down $10/mt lower at $770.00/mt and $772.50/mt, respectively. Consumers were nowhere to be seen as prices worked lower.
NEWS
Stocks are slightly lower, down 24 pts., as the Phase One deal gets signed and traders try to get any purchase details. Crude slips to $57.84/barrel. US producer price index advanced at a slightly faster pace in Dec, according to the Labor Dept., up a seasonally adjusted 0.1% in Dec. from a month earlier. OPEC increased their 2020 non-OPEC crude oil supply growth forecast by 180,000 bpd to 2.35 mln bpd. They also increased their final 2019 non-OPEC supply growth by +40,000 bpd to 1.86 mln bpd.
CALLS
Calls today are as follows:
beans: 2 1/2-3 lower
meal: .30-.50 higher
soyoil: 30-35 lower
corn: 1/2 higher
wheat: 3-5 higher
canola: .50-.80 lower
BUSINESS
USDA reports 126,000 mt of beans sold to China for 2019/20.
TECHNICALS
March Corn: Prices are in a $3.71-$3.91 trading range, but the break and recovery trade post USDA report puts the chart price action on a friendly path. The target high above a $3.90 settlement is from $4.00-$4.05. Prices are now spending time above key moving averages from $3.85-$3.87 which serves as support and increases the chance for still higher trade.
first support: $3.87
resistance: $3.91
possible range: much the same
March Wheat: Continuing to be well bid and posting a new high this morning. Top trendline resistance is close by, however, from $5.75-$5.78, and will serve as resistance as prices climb higher. If long, may want to take something off the table along trendline resistance. Overall trading range could be heading into a $5.50-$5.95 trading range eventually. The ADX trend is extremely strong at 38, meaning prices hold on pullbacks and funds will look for places to enter.
first support: $5.65
resistance: $5.75/$5.78
possible range; much the same
March Beans: Prices are sideways and caught between $9.35-$9.55. However, the tendency to fail on rallies and drift towards previous lows suggests that prices may continue to slip back towards the key pivot level of $9.33, and a break here sends prices down towards $9.21 where very good support would be noted. The trend, like in corn, remains weak as prices trend sideways. Could play the trading range but for now the chart has the appearance of wanting to break down further rather than to extend trading range highs upward. Higher markets need volume and energy, something that beans lack right now.
key support: $9.33
resistance: $9.47
possible range: $9.37-$9.47
March Meal: Sideways from $295.00-$308.00, and not budging from this sideways trade. If needing to price, anything just under $300.00 is a good place to start as the price action has stalled along the lower end of this trading range and in the same vicinity for weeks. Could straddle/strangle, but would go for an upside break-out rather than lower.
first support: $300.00
resistance: 303.50
possible range: much the same or higher
March Soyoil: Still correcting from its contract high of 3567c with a hefty long out there. Recovery trade was noted at 3350c, but the market is moving back towards this level again. Best support should we move under 3350c is then located at the 38% Fib retracement level at 33c. Given the chart toppy appearance, think we are probably headed there.
key support: 3345c-3350c
resistance: 3405c
possible range: much the same or lower
MARCH CORN
Not much new on this chart except that prices remain well bid over the 100-day moving average located at $3.87. Market peaks at $3.92 are also solidly in place. The high-volume day was on the report day, when fund selling met commercial pricing activity for a rejection of lows in the mid $3.70's. The ADX trend signals that the market remains comfortable in its sideways trade from $3.75- $3.95, and may have to encounter a huge uptick in exports and/or a growing season problem to head much higher. Could continue to straddle/strangle the market, but would be covering in shorts should the market break again towards $3.80.
TAGS – Feed Grains, Soy & Oilseeds, Wheat, North America
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